Any sufficiently advanced technology is in distinguishable from magic.

BlackBerry’s global market share just fell to 0%

Eight years ago, BlackBerry (née RIM) was riding high. The company commanded almost 25% of the global smartphone market, a higher share than any company other than Nokia. The firm was expanding its businesses in other countries and it had ridden a wave of success to become the company most people thought of when they thought about business smartphones. Today, Blackberry’s hardware business is in ruins, with a global market share of 0.0%.

That’s the word from Gartner, which recently published its Q4 smartphone rankings. Out of 432 million devices shipped in Q4 2016, just 207,900 of them were BlackBerry OS products. This might seem like a dodge, since we don’t know how many Android devices BlackBerry sold during the same period, but I don’t think it is. All indications suggest that the Priv sold poorly relative to BlackBerry’s expectations (and even its CEO has said the phone was overpriced relative to the rest of the market). Furthermore, even if we assume BlackBerry’s Android devices outsold its BB10 devices by 3:1, that still leaves the company with a global market share of 0.19% — significantly below Windows Phone, of all things.

I was curious to see if BlackBerry had said anything about its own Android sales, so I pulled the company’s financial data and earnings call transcripts. In Q1 of BlackBerry’s fiscal year 2016, the company recorded $269 million worth of revenue in its “Hardware & Other” category. By Q1 2017, that had fallen to $152 million. In Q3 of FY 2017, BlackBerry’s “Hardware & Other” revenue had fallen to $62 million.

The company’s earnings calls further support the idea that its smartphone hardware is effectively dead, regardless of whether it runs Android or BB10. In its Q2 FY 2017 call, the question of Android security relative to BB10 was briefly discussed, with one analyst noting that BlackBerry’s “highly regulated” customers didn’t see Android as an acceptable substitute for BB10. In Q3 FY 2017 not one analyst asked about BlackBerry’s hardware sales or pivot towards Android. No information was provided in Q2 or Q3 about smartphone shipments, but the declining revenue and lack of investor interest prove the point. BlackBerry may release a few more branded handsets, but it’s smartphone business is dead.

Not even Matt Smith’s amazing cheekbones or the Doctor’s time travel could save the BlackBerry Storm (seen here, sans BB branding).

The company’s fall from grace is an excellent example of what’s sometimes called the Innovator’s Dilemma. A well-established company with a dominant business model fails to anticipate the potential for new technology or services to upend its entire market. Blockbuster’s failure to adapt to Netflix is one example, and BlackBerry’s failure to respond to Apple and the rise of Android was another. BlackBerry was focused on growing its international market and believed business customers would prefer devices with physical keyboards, security features, and minimum bandwidth requirements to deliver services like email. But as 4G and LTE networks began rolling out, consumers started turning to devices that offered multimedia and convenience features that BlackBerry didn’t — notably, capacitive touch screens and more advanced third-party apps. At the same time, corporations began turning to Bring Your Own Device (BYOD) policies rather than strictly limiting which work phones people could use.

By the time BlackBerry realized it was hemorrhaging market share and users, it was too late to right the ship. Nothing the company did from 2010 – 2017 had even the slightest impact on its declining market share. The fact that analysts aren’t even asking about the product segments anymore is a clear sign that everyone expects them to vanish — and sooner, rather than later.

RIP, BlackBerry smartphones. Your parent company may well reinvent itself as a software firm, but the hardware side of the business is dead.